Introduction

HMRC can issue ‘follower notices’ which identify a relevant final judicial ruling and explain the consequences if the taxpayer does not take ‘necessary corrective action’ within the statutory time limit (ie amend their returns / claims or drop their appeals) where:

1. •

   the return or claim is subject to an ongoing enquiry or appeal (this includes an appeal against an assessment, determination or closure notice issued by HMRC), and

2. •

   there is a final judgment (which includes a decision in the First-tier Tribunal which is not appealed) in a tax case which HMRC is of the opinion applies to the taxpayer’s situation

FA 2014, ss 204–205

The penalties for failing to take the necessary corrective action following receipt of a notice can be as much as 50% of the tax and / or national insurance contributions (NIC) at stake and will apply in addition to any other penalties due, which can be up to a maximum of 100% of the tax and / or NIC (higher maximum percentages apply where an offshore matter is involved). For